In the ever-evolving landscape of HR, people leaders must be able to observe and adapt to trends in employee sentiment and workplace practices. At Norwest, we’re committed to keeping our finger on the pulse of HR operations, talent acquisition, organizational development, and systems and tools adoption. Sharing that knowledge with our portfolio companies empowers our executives to shape and maintain thriving workplaces.
Our annual Talent & People Benchmark Survey – a pillar of our HR knowledge sharing – provides a beacon of insight into how our portfolio companies foster culture, retain talent, and address common challenges in today’s ever-evolving workplace. Collecting insights from 128 portfolio companies, the 2023 Talent & People Benchmark Survey uncovered pressing questions, including:
- How are companies balancing competing return-to-office (RTO) pressures?
- How did people leaders address compensation and bonuses in the uncertain economy of 2023?
- With most layoffs behind us, how have hiring plans been impacted?
Norwest’s Talent and People teams analyzed the survey responses for insights into how Norwest portfolio companies are adjusting to the changing landscape of the 2020s. I’ve compiled our takeaways below and hope the survey results provide timely guidance for people leaders as they adjust their forecasts and set their strategies for 2024.
Let’s dive into the key findings.
The End of Full-Time Office Work
One striking revelation from this year’s survey is that the era of full-time office work seems to be over.
A mere 8 percent of companies now require employees to be in the office full time. Companies are adapting to evolving expectations around workplace flexibility, offering adjustable arrangements and remote work options.
More companies are offering fully remote work options. The number of companies whose employee base is over 80 percent fully remote has nearly doubled since 2022.
When it comes to hybrid work models, companies stick to 2-3 days in office. What does this new work landscape look like in practice? Our survey data paints a vivid picture: the most common hybrid work model involves employees spending two days a week in the office, closely followed by three days. They view this hybrid model as the best blend of in-person collaboration and the flexibility of remote work.
Here’s the kicker — with many in the C-suite wanting more in-office time, companies are pulling out all the stops to entice employees back into the office. They’ve recognized that the traditional office draws of yore (hello, water cooler chats) are no longer sufficient. Among other creative perks, they’ve turned to the universal language of food and beverages. Coffee machines, snack bars, and catered lunches are, once again, the sweetener of choice in the efforts to attract employees back to HQ.
One portfolio company, Exabeam, uses their time together in the office to celebrate different cultures, often curating unique experiences for their employees.
“We’ve received very positive employee feedback about our remote-friendly, hybrid approach to work,” Exabeam Chief Human Resources Officer Gianna Driver said. “Our carrot (not stick) approach entails partnering with ERGs monthly to sponsor fun, collaborative events in the office. Employees love it, and it’s done wonders for culture. We’ve had lion dancers for AAPI month, a live mariachi band during Hispanic Heritage month, a Diwali festival, a sound bath meditation, and more. The in-person relationships employees make during these culture-building events lead to more engagement both in the office and remotely.”
“We’ve received very positive employee feedback about our remote-friendly, hybrid approach to work. Our carrot (not stick) approach entails partnering with ERGs monthly to sponsor fun, collaborative events in the office. Employees love it, and it’s done wonders for culture.”
– Gianna Driver, Chief Human Resources Officer, Exabeam
As more people come back to the office, companies are finding ways to keep employees engaged no matter where they’re working.
The pandemic may have ignited the remote work revolution, but current hybrid models may no longer be a matter of convenience. Not only are employees relishing in the newfound flexibility, it’s a critical tool for attracting and retaining talent.
“This approach has really supported our talent goals and enabled us to better compete for talent as we’re no longer restricted to the Bay Area,” she explained. “That said, we see a need to continue to invest and focus budget dollars and efforts with more frequent in-person interactions and much more intentional communication, coaching, and feedback.”
The 5-day commute plus nine-to-five grind is fading into the annals of history, making way for a future where employees have a happy medium between office and home.
Companies Prioritize Mental Health
In the whirlwind of modern work, employee well-being takes center stage.
Mental health benefits surge to meet employee demand. Since 2021, there’s been a staggering 61 percent surge in companies offering employer-sponsored mental health benefits or therapy platforms to their employees.
This increase directly responds to the amplified stress levels gripping the workforce. Factors like reductions in force (RIFs), the looming specter of inflation, and the persistent anxiety stemming from the pandemic have collectively created a perfect storm of workplace stressors. At the same time, stigma around mental health has waned dramatically in the three years since the start of the pandemic. The seismic shift in talking openly about mental health is not only a bright spot for all workers, but an opportunity for companies to provide support to their most valuable assets.
What’s even more heartening is the proactive approach many Norwest companies are taking. Our survey revealed that 44 percent of companies have witnessed a noticeable uptick in mental health needs since the pandemic struck. They are not merely reacting to the surge in mental health needs; they are actively enhancing their mental health resources for employees.
Vice President of Human Resources at Cority, Marlene da Costa, said any seminar, tool or mental health initiative has always been appreciated in their office because it does so much to open up the conversation around mental health.
“When employees bring themselves to work, they bring with them their struggles and their everyday personal challenges as well. Having the words and mechanisms to have meaningful conversations with peers and teams goes a long way in employee engagement,” she said. “We do annual mental health training specifically designed for managers and run by a certified psychotherapist. We have learnt through pulse surveys that these do make a difference in the way the managers lead their team with compassion and kindness.”
“When employees bring themselves to work, they bring with them their struggles and their everyday personal challenges as well. Having the words and mechanisms to have meaningful conversations with peers and teams goes a long way in employee engagement.”
– Marlene da Costa, Vice President, Human Resources, Cority
One of our portfolio companies, ICON, has expanded its mental health benefits to include flexible digital support, meditation, and coaching in addition to therapy and medication. Lauren Miller, Head of People at ICON, believes mental health is essential for overall health, and is happy to see the impact of their offerings.
“Having a digital mental health solution has allowed for maximum flexibility when caring for people with busy schedules, frequent travel and work in the field,” she said. “Employees have appreciated the expanded care and are sharing more openly in channels like Slack about mental health as a result.”
Inclusive Policies Extend to PTO and Parental Leave
Paid time away from work is more generous, more inclusive.
Nearly 80 percent of surveyed companies now offer at least 11 paid holidays, reflecting a growing emphasis on diversity, equity, and inclusion (DEI) initiatives. This expansion extends to recognizing a broader range of holidays, including culturally significant days like Juneteenth and Diwali. Notably, a recent Deloitte study indicates that a company’s commitment to societal impact, diversity, inclusion, and sustainability significantly increase job loyalty.
Parental leave policies are more generous than last year. Most companies now provide primary caregivers with 13+ weeks of leave, ensuring they have the time they need to care for their families. Secondary caregivers are also seeing improved benefits, with 5+ weeks of leave becoming the norm. Even companies that do not differentiate between primary and secondary caregivers have stepped up their game, offering 11-13 weeks of leave. This shift underscores a collective recognition within the industry that diverse and inclusive policies are essential to attract top talent while accommodating the evolving needs of new parents.
Talent Acquisition Trends and Benchmarks
In the dynamic realm of talent acquisition, our survey data illuminates a shift in how companies source their workforce.
Companies are relying less on external talent acquisition agencies and more on internal talent teams. The data shows a notable 21 percent year-over-year increase in the number of companies conducting less than one-quarter of their hiring through outside agencies. Several factors are driving this change. First, the cost-effectiveness of in-house recruitment is undeniable and second, companies may be hiring less people given the economic climate.
Over two-thirds of companies hire their first HR leader before they’ve reached 100 employees. The need for HR leadership is usually apparent before a company reaches 100 employees. Almost 70 percent of companies hire a head of people/HR when they reach that benchmark. Beyond culture-building, these leaders play a vital role in establishing infrastructure, programs, and ensuring legal compliance as the company scales.
Bonuses and Stock Options: A Financial Balancing Act
Companies walk a fine line between incentives and financial stability.
Over half of companies surveyed tie bonuses to revenue floors. In a bid to create more flexible and scalable bonus systems, 58 percent of surveyed companies now tie bonuses to revenue floors for all employees, representing a 40 percent increase from our 2022 survey. As for who receives bonuses, about half (54 percent) of companies offer bonuses to all employees, while a third only offer bonuses to managers and above. This shift means 2023 bonuses are more dependent on overall company performance as well as offered more broadly to rank-and-file employees.
Most companies stand by the standard, 90-day exercise window for terminated employees. Contrary to some reports, nearly 70 percent of companies indicate that the standard exercise window for terminated employees remains at a standard 90 days. As the economy stabilizes, most companies are returning to this established practice, providing terminated employees with a reasonable timeframe to exercise their stock options. A good sign for companies trying to manage their stock options.
“Our portfolio companies know that hiring will pick back up again, and they will need unexercised options by departing employees to hire, promote, and retain employees,” Norwest Talent Principal Teri McFadden said. “Sticking with the standard 90-day exercise window will help our companies manage their option pool for the long term as exit horizons have also been pushed out in this current economy.”
“Our portfolio companies know that hiring will pick back up again, and they will need unexercised options by departing employees to hire, promote, and retain employees. Sticking with the standard 90-day exercise window will help our companies manage their option pool for the long term.”
– Teri McFadden, Talent Principal, Norwest
Guidance for Your 2024 HR Planning
In the post-pandemic evolving workplace, adaptability and an ability to understand the implications of changing norms and practices is essential. I find it incredibly helpful to understand how my peers are navigating these changes, and hope our 2023 Talent & People Benchmark Survey findings can provide that guidance for your 2024 plans.
I’d like to thank Laura Buckingham Thomas for driving this survey year after year, as well as our dedicated Talent leaders Teri McFadden, Kris Snodgrass, Lauren Heller, and Julia Lewis for their insightful contributions.
For more data, download the full results from the 2023 Norwest Talent & People Benchmark Survey. Get the data.